After nine months of hearings involving 337 witnesses and 300 written statements at a cost of £6million, the PM took less than 24 hours to reach his judgment.

His stance was cheered by champions of a free press – but sparked outrage among campaigners and victims of phone hacking.

In a milestone 1,987-page report in the wake of the hacking scandal, Lord Leveson said newspapers had “wreaked havoc in the lives of innocent people”.

He demanded a new independent watchdog, enshrined in law, with the power to impose fines up to £1million.

But his recommendations sparked a political storm with Mr Cameron and Deputy PM Nick Clegg clashing in the Commons over the need for state control. Mr Cameron told MPs he had deep concerns about creating laws to set up the new watchdog.

He warned: “For the first time we would have crossed the Rubicon of writing elements of press regulation into the law of the land. We should, I believe, be wary of any legislation that has the potential to infringe free speech and a free press.”

While agreeing with the thrust of the report, the PM said it should be left to the industry to try to come up with its own beefed-up regulatory system.

In an unprecedented move, Mr Clegg then made a statement to explain why he backed a watchdog underpinned by law.

He told the Commons: “There are two big, liberal principles at play in this debate: on the one hand, the belief that a raucous and vigorous press is the lifeblood of a healthy democracy.

“On the other, the belief that the vulnerable, the innocent and the weak should be protected from powerful vested interests."

PA

Warning: David Cameron in House of Commons yesterday

He added: “Changing the law is the only way to give us all the assurance that the new regulator isn’t just independent for a few months or years, but is independent for good.”

How Leveson's new watchdog would work

Lord Justice Leveson’s main proposal is for an independent press watchdog with powers to impose fines up to £1million.

The new regulatory body would be enshrined in law, giving MPs the power to assess if it is doing its job properly.

Newspapers are now overseen by the Press Complaints Commission, which has serving and former editors on its panel.

But there was common agreement at the Leveson Inquiry that the PCC was not strong enough.

So its chairman Lord Hunt, along with Lord Black, put forward the idea of a beefed-up self-regulatory watchdog with powers to investigate and fine papers. Lord Justice Leveson rejected the proposal.

He said it was not independent enough from the newspaper industry and did not “represent the interests of the public”.

His watchdog would have no serving editors or MPs. Although it would be voluntary, he suggests papers not signing up would be policed by Ofcom.

The new regulator would have the power to impose fines of 1% of a newspaper firm’s turnover or a maximum of £1million.

It could also dictate the size and prominence of apologies and would have the power to instigate investigations.

The report also calls for an arbitration system, so papers and people seeking redress can avoid costly libel actions.

Lord Justice Leveson also suggests a kite mark for titles signed up to the new regulator and a whistleblowing hotline for journalists who feel under pressure to act illegally.

He said: “What is proposed is independent regulation of the press organised by the press, with a statutory verification process to ensure the required levels of independence and effectiveness are met.”